Doing a Tenant Background Check and Tenant Credit Check
The following screening tips were not borrowed from a website or blog but instead are the ones that I have put into practice when renting my properties and that I just exercised when I recently had top find a new renter for one of my properties. Let me share how I used these tenant screening tips to select my new tenants.
It turns out that due to my miscalculation on when the lease was supposed to end I got hit with an unexpected vacancy. I found out about the tenant leaving around the end of the month.
Additionally my tenant had also “forgotten” to notify me that she was leaving. So this little mistake on my part cost me 30-60 days that I could have used to advertise the property!!
Anyway, I had to very quickly go on the hunt for new tenants. Aside from all the advertising that I had to do to find them once I got applicants I had to conduct a tenant credit check and a tenant background check, all in accordance with tenant landlord laws before we could sign our landlord tenant agreement.
I have used the following tenant screening tips to fill three vacancies so I improve on them every time but so far (knock on wood) they have delivered good tenants.
Tenant Screening Tips #1: Have a thorough rental application.
The internet is full of these and you can get them for free. As an example you can see the rental application that I use and another example here. You want to have an application that first, gives you full information on identifying the tenant (full name, social security, drivers’ license, address, etc.) and second, provides you information that you can then use to conduct a tenant background check.
You will have each adult that occupies the property fill out an application. Do not do one application for two or more adults. You want to find out specific details of each person.
In this latest screening that I did for a couple they had not been together for a long time so they had different rental, employment and credit histories, so I want to find out as much as I can about both.
It is also very important that you charge an application fee (non-refundable). This fee will help you cover the costs that you will incur when doing the tenant credit check and your time. But most importantly it starts to indicate their level of commitment towards actually going through with the rental. This way the ones that turn in an application with a check are serious about wanting the property.
I charge $35 per adult and have seen other landlords charge a much larger amount. They call it earnest money and it can equal the first months rent and then it gets turned into the security deposit if the application is accepted or gets refunded (minus screening costs) if the application is not accepted. Make sure you check your states’ tenant landlord laws to see what you can/cannot charge.
Tenant Screening Tips #2: Meet and interview the tenants.
Seems obvious but with all the remote communication capabilities available it is very possible for you to rent to someone that you have never physically met whether you do it yourself or use a property management firm.
However, the reason you want to meet them is so that you use the meeting as a screening opportunity.
For example, look at their car...I had an applicant that shows up in a minivan with three kids inside. The moment they open up the car door I see about 3 weeks worth of trash in the floor of the car and one of the kids spills their soda in the driveway as they are walking into the house...
If their car looks like that and they are this careless imagine how they will be with my house...
Now, I got to be careful, I cannot deny this applicant because they have children. That would be against my state tenant landlord laws. But in this particular case the house was not big enough for this family so they moved on.
Also, when meeting with tenants you will get a feel, even so slightly, who you are dealing with. Now this certainly says nothing of their ability to pay, their honesty, or how they will take care of your property but it is a start.
I had this couple ask me how often I was going to come around and check the house...Hmmmm...why would she want to know this????.
I also had another applicant be very straightforward and tell me she had a bankruptcy that was one year old and if that was going to be a problem. I actually welcomed her sincerity, especially since I would have found out later and then have to confront her with it.
You want to make sure you at least ask the following: where they work, what they do, what are they looking for, what other properties have they looked at, how many children, how many people occupying the house (which is not the same as how many children!), do they have any pets (my past tenant “forgot” to tell me about this), how did they found out about the house, how long do they think they are staying for, will they be interested in buying eventually and any other questions you can think of to get them to talk about themselves, interests and why they want your house.
And then shut up...just let them answer and watch their response.
As they are answering the questions watch their tone, eyes, gestures and anything else that might give you clues as to whether they are being honest, misleading, trying to downplay a past eviction or collection or something similar.
If they have pets ask about the pet but also ask about their handling of the pet. For example, if someone tells me they have a dog but then say
it’s an outside dog...or,
we keep him outside all the time...or,
he will not come in... etc.
All of these scenarios can be difficult. An outside dog can actually be worst because now you can have a dog that is barking all day, digging your yard out of boredom and scratching your patio doors all the time because he is outside and wants to be in.
In my experience pets are not the problem, pet owners are...
These are only some of the reasons why you want to meet and interview in person your applicants.
Now that you have gotten the tenants information along with their permission for you to do a credit and background check, you need to get to work. In the second part of these tenant screening tips I will share with you how to simplify the next part of screening potential tenants.